Business Discovery- Do Your Research and Get out of the Building

A business or product starts with an idea to fulfill a need or provide a service. Entrepreneurs who build it run the risk of doing the wrong thing and very often pour in months of effort only to chase elusive success. What can entrepreneurs do to discover their business better? How can they answer the questions “What pain are you solving, what gain are you giving the customer?”

The 2-step approach proposed, can be done easily and quickly, which goes a long way to help validate the market and validate the problem, with almost no investment other than time and effort. Following these steps as a discipline clears several assumptions made by entrepreneurs and develops a healthy, open approach towards maintaining objectivity between the product and themselves leading to happy customers and a thriving business.

Step 1 – Validate the Market.

Use these tips to while doing research on the market –

Trawl online resources such as open reports from established consulting firms. Yes – some of them are free and have enough market data to get you started.

Business vertical news feeds to uncover various market segments.

Simple infographics from verified sources. Several government agencies and reputed research firms share a lot of good data charts.

There is plenty of useful information freely available for any business to leverage in its early stages, without having to pay a lot for it. Challenges include sifting through largely unstructured and spotty information, to obtain relevant facts and numbers. However, once the discipline of research is developed as a practice, it becomes efficient over time.

The outcome of this exercise has 2 key takeaways –

Ecosystem Understanding –

See the broader market picture compared to the relatively narrower view during product inception.

Obtain size, growth rate, broad segment-wise break down and potential for growth. The research also reveals possible adjacencies for the product, potential markets and answers at a high level whether the market is large enough to justify the need.

Narrow down one or two target areas for a product/service trial.

Competitor Understanding –

Learn how competitors are trying to solve the same problem.

Find at least three other competitors.

Uncover similar products and solutions and then, find out as much as possible about them.

Crawl competitor profiles, read their blogs and look for media coverage are some of the Other learnings include size of their team, pricing structure, finances and product features.

These takeaways are simple to obtain and enable a new business to validate the market and identify customers in at least one or two market segments. Its crucial data obtained at almost no cost.

Step 2 – Validate the problem

The second step is for the business/entrepreneur to simply “Go out there and talk to people”. Now that there is some larger understanding of the ecosystem and at least 1-2 target customer areas, here is what needs to be done –

Find a set of people who are “in” –

Find at least 5 people who say they would be keen to use the hypothetical product. They should ideally belong to one or two areas identified in the first step. This is a sensible indication that there is a problem worth solving. While it doesn’t necessarily guarantee that the problem exists or that the proposed solution is good or valuable, it’s the simplest way to begin validating the problem that has been identified.

Interview users – Sitting down with people preferably face-to-face or over the phone to understand the following –

Their motivations for doing what they are currently doing.

Their needs – this helps the entrepreneur define the solution in terms of the need and not the problem.

Sharing their past experiences and current challenges and understand their feelings through these experiences to help build customer empathy.

Avoiding leading questions, which tend to bring in the bias of the entrepreneur are helpful to develop an unbiased understanding of user needs. Having a team comprising of an interviewer to ask questions and an observer to take notes helps focus and validate the interview.

Getting people to talk about their business and challenges reveals builds customer empathy in the entrepreneur. It is an education and understanding that is well worth stepping out of the building and dismantling boundaries built through assumptions.

Using the 2-step approach has some bonus outcomes too, such as –

“in” customers willing to partner and co-create to build the product.

Validate willingness to pay and arrive at potential business models.

Enables development of a product roadmap and plan that sets the ball rolling for product MVP (Minimum Viable Product) or POC (Proof of Concept) development that are the logical next steps which then lead to early testing with customers and feedback on the product.

Inculcating a discipline for business discovery doesn’t need any other investment other than a focused, approach and dedicated time. Pivoting is quick, refinement and enhancement are timely and most of all, realistic understanding and empathy building with customers are established early on. This builds a solid base on which to build out a product/service MVP and launch field trials quickly.